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Canning Steve Ballmer no Microsoft cure-all

By , Network World
October 08, 2010 09:58 AM ET
Steve Ballmer

Network World - Steve Ballmer has been CEO of Microsoft for more than a decade, and it seems he's spent much of that time fighting off speculation that Microsoft should fire him.  

Ballmer, a 30-year Microsoft veteran who went to Harvard University with Bill Gates, has survived even as Microsoft faltered in the mobile and consumer markets and watched rival Apple take over Microsoft's former position as the world's most valuable technology company.

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Some shareholders have complained that Microsoft's stock has underperformed for years and placed the blame at Ballmer's desk.  

Even Microsoft's Board of Directors, in a recent Securities and Exchange Commission filing, referred to "the unsuccessful launch of the Kin phone" and "loss of market share in the company's mobile phone business" when it decided not to award Ballmer the full bonus he was eligible for.

Although you could argue Microsoft's Windows, Exchange and Office businesses are humming along (despite the Vista debacle), Microsoft's mobile struggles in the face of Apple's iPhone and Google's Android platform are among the issues that constantly fuel speculation about Ballmer's future.

"My personal opinion is he is long past due," says Craig Montgomery, who led a grassroots shareholder activism movement last year in an attempt to force changes at Microsoft. "Mr. Ballmer is not the correct leader for Microsoft."

But the biggest question may not be "Should Ballmer be fired?" A more important question may be "who can replace him?"

Despite the so-called "consumerization of IT," in which the worlds of business and consumer technology are slowly merging together, it is still very difficult for any one company to be the dominant technology provider in both the home and corporate markets.

"Ballmer may be facing an impossible task and it may be he's not doing a particularly good job, but it may be that no one could. And maybe even Bill Gates couldn't," says industry analyst Roger Kay, president of Endpoint Technologies Associates.

That being said, Kay says he has come to believe that Microsoft could do better with a different CEO. "The [Microsoft] board should have set a timer on Ballmer's tenure and said 'if we don't start seeing certain metrics then we're going to find a replacement for you,'" Kay says.

Microsoft dominates its strongest categories as much as Apple dominates its strongest areas, but "where Microsoft is getting killed is they're not competitive where Apple is," says analyst Rob Enderle of the Enderle Group. Ballmer has opened himself up to criticism even though Microsoft's Windows business has succeeded against Linux, and Exchange has "knocked Lotus Notes right off the map," Enderle says.

Kay suggests that Microsoft's ambitions are outstripping its actual capabilities. Microsoft built gigantic businesses with Windows and Office, and servers and tools, but creating monopolies in more than one or two businesses may be beyond the reach of even Microsoft, Kay says.

Enderle argues that "there aren't many people on the planet" who could run a company like Microsoft, saying that even Oracle's Larry Ellison and leaders of companies such as IBM don't have to manage the diversity of categories that Ballmer is tasked with. "They are a software and product company that spans consumer to large-scale enterprise products. That's more breadth than IBM has in terms of customers, and exceeds the existing skills of, probably, the leaders of the other major software companies," Enderle says.

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